Cost Guide
Complete HVAC Replacement Cost Ontario 2026
Furnace, AC, and ductwork bundle pricing with real Ontario numbers. Equipment costs, installation labour, permits, and the hidden line items most quotes leave out.
Key Takeaways
- A combined furnace and central AC replacement in Ontario typically runs $8,000 to $14,000 installed, with the full range from $5,000 to $18,000.
- Equipment accounts for roughly 50-60% of the total cost; installation labour, permits, and ancillary work make up the rest.
- Hidden costs like ductwork modifications ($1,500-$5,000), electrical upgrades ($1,500-$3,000), and permit fees ($200-$500) can add significantly to your final bill.
- Bundling furnace and AC replacement saves $500-$1,500 compared to two separate projects.
- Federal rebates through the Home Renovation Savings Program can offset $2,000-$7,500 of qualifying heat pump installations (as of early 2026).
What Does a Full HVAC Replacement Actually Cost?
Replacing your home's heating and cooling system is one of the largest home improvement investments you will make. In Ontario, a full HVAC replacement typically means a new furnace, a new central air conditioner, and potentially modifications to your existing ductwork. The total cost depends on your equipment choices, the complexity of the installation, and where in Ontario you live.
The numbers below are based on typical Ontario residential installations for homes between 1,200 and 2,500 square feet.[1] Prices reflect 2025-2026 market conditions including post-pandemic supply chain normalization and updated building code requirements.[7]
Equipment Costs by System Type
Equipment is the single largest line item on any HVAC quote. Here is what you can expect to pay for the unit itself, before installation:
| System Type | Budget Range | Typical Range | Premium Range |
|---|---|---|---|
| Gas Furnace (mid-efficiency 80%) | $1,800-$2,500 | $2,500-$3,500 | $3,500-$5,000 |
| Gas Furnace (high-efficiency 96%+) | $2,800-$3,500 | $3,500-$4,500 | $4,500-$6,500 |
| Central Air Conditioner | $2,000-$3,000 | $3,000-$4,500 | $4,500-$7,000 |
| Cold-Climate Heat Pump (ducted) | $8,000-$12,000 | $12,000-$15,000 | $15,000-$20,000+ |
| Ductless Mini-Split (single zone) | $3,500-$5,000 | $5,000-$8,000 | $8,000-$12,000+ |
| Geothermal System | $25,000-$30,000 | $30,000-$40,000 | $40,000-$45,000 |
A few important notes on equipment pricing. The "budget" range usually means a builder-grade unit with basic features and a shorter warranty. The "typical" range covers name-brand mid-tier equipment (Lennox, Carrier, Goodman, Daikin) with standard warranty coverage. Premium units offer features like variable-speed compressors, modulating gas valves, and extended 10-12 year parts warranties.[6]
Installation Labour Costs
Installation labour typically accounts for 30-40% of your total project cost. In the Greater Toronto Area, expect to pay $2,000 to $4,500 for a standard furnace and AC installation. This includes removing the old equipment, installing the new units, connecting refrigerant lines, gas piping, and electrical, and commissioning the system.[6]
Labour rates vary significantly across Ontario. GTA contractors typically charge higher rates due to operating costs, while rural and northern Ontario installers may charge 20-40% more due to travel time and distance from suppliers.[8] A job that costs $3,000 in labour in Mississauga might cost $4,000-$4,200 in Sudbury or $3,600-$4,000 in Kingston.
What Labour Should Include
A reputable installer's labour quote should cover all of the following:
- Removal and disposal of the old equipment
- Installation and mounting of new equipment
- All refrigerant piping and connections
- Gas line connections (for gas appliances)
- Electrical wiring to the new units
- Thermostat installation or relocation
- System startup, testing, and commissioning
- Registration of manufacturer warranties
If any of these items appear as separate line items on your quote, ask why. Some contractors pad quotes by unbundling standard installation tasks.
Combined Furnace + AC Bundle Pricing
Most Ontario homeowners replace their furnace and AC together, and for good reason. The cost savings from bundling are real:
| Bundle Tier | Total Installed Cost | What You Get |
|---|---|---|
| Budget | $5,000-$8,000 | 80% furnace + 14 SEER AC, basic thermostat, standard warranty |
| Mid-Range | $8,000-$14,000 | 96% furnace + 16 SEER AC, programmable thermostat, 10-year parts warranty |
| Premium | $14,000-$18,000 | Modulating furnace + 18+ SEER AC, smart thermostat, extended warranty, variable-speed blower |
The mid-range tier is where most Ontario homeowners land. A 96% efficient furnace paired with a 16 SEER air conditioner offers an excellent balance of comfort, efficiency, and value.[1]
Permits and Inspections
Every HVAC replacement in Ontario requires permits. This is not optional, and any contractor who suggests skipping the permit process should be a red flag.[2]
- Municipal mechanical permit: $200-$500 depending on your municipality
- TSSA gas inspection: Required for all gas appliance installations. Your contractor should arrange this as part of the job.
- Electrical permit: $100-$300 if electrical work is required (panel upgrades, new circuits)
A TSSA-certified gas technician (G2 or G1 licence) must perform all gas appliance installations in Ontario.[2]Always ask to see your installer's TSSA certification before work begins.
Ductwork Modifications
Ductwork is the variable that can swing your project cost by thousands of dollars. If your existing ductwork is in good condition and properly sized for the new equipment, minimal modifications may be needed. But older homes, particularly those built before the 1980s, often need significant duct work.
- Minor modifications (resizing plenums, adding a return): $500-$1,500
- Moderate ductwork (extending runs, sealing, adding zones): $1,500-$3,500
- Major ductwork (full replacement or new installation): $3,500-$5,000+
A good contractor will assess your ductwork during the initial consultation. If they quote you for a new furnace without looking at your ducts, get a second opinion.
Electrical Upgrades
Switching from gas to electric heating (like a heat pump) or installing modern high-efficiency equipment may require electrical upgrades:
- New dedicated circuit (30-60 amp): $300-$800
- Electrical panel upgrade (100A to 200A): $1,500-$3,000
- Panel upgrade with new meter base: $2,500-$4,000
If your home still has a 100-amp panel and you are considering a heat pump, budget for a panel upgrade. Most cold-climate heat pumps require a 200-amp service.[1]
Hidden Costs Most Quotes Miss
Beyond the big-ticket items, several smaller costs can add up:
- Asbestos abatement: If your old ductwork or insulation contains asbestos (common in pre-1980 homes), removal costs $2,000-$6,000 and must be done by a licensed abatement contractor.
- Thermostat and controls: A basic programmable thermostat is $50-$150. A smart thermostat (Ecobee, Nest) runs $250-$400 installed.
- Disposal fees: Most contractors include disposal in their quote, but some charge $100-$300 separately for hauling away old equipment and refrigerant reclamation.
- CO detector upgrades:Ontario's fire code requires CO detectors near all sleeping areas in homes with fuel-burning appliances. Budget $50-$150 per detector if yours need replacing.
- Condensate drainage: High-efficiency furnaces produce condensation that needs a drain line. If one does not exist, adding it costs $200-$500.
- Venting changes: Upgrading from a mid-efficiency to a high-efficiency furnace often requires new PVC venting ($200-$600) and may involve patching the chimney.
How to Save on Your HVAC Replacement
1. Get Multiple Quotes
Three quotes is the minimum. Look for HRAI-member contractors with TSSA certification and verifiable references.[6] Prices for the same equipment and scope can vary by $2,000-$4,000 between contractors.
2. Time Your Purchase
Spring and fall are peak HVAC replacement seasons. Booking in late winter or mid-summer (outside of heat emergencies) can sometimes get you better pricing as contractors fill slower periods.
3. Claim Available Rebates
As of early 2026, the federal Home Renovation Savings Program (HRS) offers up to $7,500 for qualifying air-source heat pumps in electrically heated homes and up to $2,000 for gas-heated homes switching to a heat pump.[5] The Oil to Heat Pump Affordability (OHPA) program provides $10,000 standard or $25,000 for income-qualified households switching from oil heat.[5]
Note that the Canada Greener Homes Grant closed in December 2025 and the Enbridge Home Efficiency Rebate Plus (HER+) program closed in February 2024.[4] Always verify current program availability before making purchasing decisions based on rebates.
4. Consider Total Cost of Ownership
A higher-efficiency system costs more upfront but less to operate. A 96% efficient furnace uses roughly 16% less gas than an 80% unit over its lifetime. At current Ontario natural gas rates[3], that difference can add up to $3,000-$5,000 in savings over a 15-20 year equipment life.
GTA vs. Rural Ontario: Price Differences
Where you live in Ontario matters for pricing. Here is a rough comparison for the same mid-range furnace and AC bundle:
| Region | Typical Installed Cost | Premium vs. GTA |
|---|---|---|
| Greater Toronto Area | $8,000-$12,000 | Baseline |
| Ottawa / Hamilton / London | $8,500-$13,000 | 5-10% |
| Barrie / Kingston / Windsor | $9,000-$14,000 | 10-20% |
| Northern Ontario (Sudbury, Thunder Bay) | $10,000-$16,000 | 20-40% |
The premium in rural and northern areas reflects higher travel costs, fewer competing contractors, and increased shipping costs for equipment.[8]
Frequently Asked Questions
How much does a full HVAC replacement cost in Ontario in 2026?
A combined furnace and central air conditioner replacement in Ontario typically costs $8,000 to $14,000 installed, though the full range is $5,000 to $18,000 depending on equipment tier, home size, and ductwork modifications.
Are permits required for HVAC replacement in Ontario?
Yes. Most Ontario municipalities require a mechanical permit for furnace or AC replacement. Permit fees typically range from $200 to $500. Gas appliances also require a TSSA inspection.
How long does a full HVAC replacement take?
A straightforward furnace and AC replacement typically takes one to two days. If ductwork modifications, electrical upgrades, or code compliance work is needed, the job can take three to five days.
Should I replace my furnace and AC at the same time?
Replacing both at the same time is usually more cost-effective. You save on labour since the contractor is already on site, and matched systems run more efficiently. Bundling typically saves $500 to $1,500 compared to two separate installations.
What HVAC rebates are available in Ontario in 2026?
As of early 2026, the federal Home Renovation Savings Program (HRS) offers up to $7,500 for qualifying heat pumps in electrically heated homes and up to $2,000 for gas-heated homes. The Oil to Heat Pump Affordability program offers $10,000 to $25,000 for oil-heated homes switching to heat pumps.
- Natural Resources Canada Heating and Cooling With a Heat Pump
- TSSA Fuels Safety: Homeowner Information
- Ontario Energy Board Natural Gas Rates
- Enbridge Gas Home Efficiency Rebate Plus Program
- Natural Resources Canada Home Renovation Savings Program
- HRAI Find a Contractor
- Statistics Canada Consumer Price Index: Shelter
- CMHC Housing Observer: Housing Renovation Costs